Arizona Short Sale Specialist: california hard money fix & Flip loans

Private Money Lenders in California can you get you the money you need and get it to you quickly, but are you fully aware of what you could be getting into by using one of them?

It’s a sad fact in business, but a fact nonetheless. Sometimes, there are going to be things that come up that you can’t plan for and can’t ignore. You are going to have to deal with them. But if you are a young, up-and-coming business, chances are good you are not going to have a lot of capital just laying around waiting for you to put it to work.

So—you are going to need money and depending on the severity of the issue that arose, you are going to need it quick. Private Money Lenders in California are generally quick to approve loans for cases such as yours, so you decide to hit one up.

However, before doing so, there are things you should keep in mind.

Do You Really Know What You Are Getting Into With Private Money Lenders in California?

Before you get into business with a private money lender, it is good to have an understanding of what you are getting into.

They are not going to give you a 30-year loan. They don’t do long-term loans. Private money lenders are into short-term loans; stuff more in the three to 18-month range. Before you know it, you are going to have payment to make, and since the term of the loan is short, they are going to be bigger. It’s great to be able to get the money in a few days rather than weeks or months (like through other channels). But they are going to want their money back quickly as well.

So, be sure you can handle the payments before entering into any kind of deal. With the high-interest rate that you’ll get charged and the fewer number of payments, your monthly note can be high depending on how much your loan is. Yes, you may need the money and don’t have any other choice, but there is always another way.

No sense in trading one problem for another.

Will it Really Help?

At the time, it may feel like the cash you can get from Private Money Lenders in California is the only viable option. But sometimes you need to figure out how to take a step back and look objectively at your situation to figure out if it will really help.

Will it help you generate revenue? The loan is money you are going to have to pay back so will whatever you need it for help you make more money? Or are you trying to cover expenses because you didn’t make enough? If so, then you may have a larger issue on your hands.

If this loan is not going to help your cash flow, then maybe it is time to come up with an alternative solution—or an alternative form of revenue.

About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

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1. Calculate your profit before you purchase the home.

The old saying is “you make your profit when you purchase the home not when you sell it”. This means calculating a profit and lost analysis on the Fix & Flip project before you purchase. Determine the profit before you purchase – work backwards. Don’t do a project unless there is a clear profit potential. Calculate your profit/Loss. Sales price less costs is your profit.

1. Costs for Fix & Flip

Acquisition
Purchase Price

Back Taxes and other liens

HOA Fees

Keys

Bid or Real Estate Fees

Closing Costs

Repairs

Contractor or do it yourself

Appliances + much more

Holding

Cost of capital to hold

Payments on hard money loan

Utilities
Insurance

Maintenance

Selling

Real Estate Commissions

Staging

Title closing costs

Marketing Plans

Administration

Bookkeeping accounting

Other non-related expenses

2. Have a good team of Contractors/others to do the work.

Suppliers

Real Estate Agent (hopefully it will be you)

Hard Money Lenders (give me a call)

Insurance agents

3. Get educated.

Don’t start buying homes without knowing the process. The best way to get started is to get your Real Estate license. Yes, it’s work, but it will give you the knowledge you need to understand how homes are transferred and the laws associated with real estate. Also, you will have access to the multiple listing service, which is invaluable for your research. Plus you can avoid the partial cost of the seller commission since you will be the listing agent. Every successful flipper I’ve ever meet had their real estate license.

4. Be patient.

There used to be a lot of homes being sold on the court room steps, sometimes a 1,000 homes per day. Today there are a lot less homes to purchase. You need to look at other ways of purchasing and finding deals. It’s going to take time to find, fix and sell. You can do it, but it’s going to take time. In the real estate investment world, timing is everything.

5. Have Money.

Don’t believe those people on the radio that say you can buy homes for no cash down. It’s not true.

You are going to have to have cash, skin in the game to purchase the home. Private hard money will require a down payment of 20-30% of the purchase price. And it’s not going to be cheap when you start. Rates vary from 9-18%. Don’t forget to calculate the cost of Hard Money in your profit and loss in item 1 above. Some hard money lenders market their loans as having the potential to fund an investment at 100% LTC (Loan-To-Cost), meaning a borrower won’t have to put a dime into the project. Although there are some scenarios where this is true, it’s very rare. There are some lenders that will participate in the deal. These lenders will fund the deal and share in the profit when the deal is completed. However, all of the participating lenders put a great deal of their decision on working with you on your response to #3 above and still require 10% of your money in the deal.

6. Don’t buy something you can’t fix or ever sell.

There are a lot of deals out there and they are deals for a reason. Some are in a situation, so bad, no matter how much money and work you put into the home, you will never sell it. For example a home built on top a land fill, or next to a dump, or sewage treatment facility, or the final approach to an major airport. You are not going to be able to fix these problems.

7. Buy your project through your LLC.

There is a lot of tax and liability reasons to do this. Plus, private lenders prefer to lend to LLCs.

8. It’s going to be work.

Don’t believe what you see on those flipping shows. You will have to work at it and it will take time. You need to visit the property and make sure the work is progressing correctly. After the home is completed and on the market, you will need to walk the property daily. So where do you start? I suggest that you start with #3 Get Educated. However, don’t go and pay for those weekend training seminars that cost 1,000s of dollars. Start at your local Real Estate School and get your State License.

About ME.

Hi, my name is Dennis Love.

I’m a business owner like you with over 40 years of business experience helping business owners around the world, including 7-figure businesses, small businesses and startup businesses that now make millions of dollars per year.

But the question is why do I do this? Personally, I had a very special person do something for me in the past to help me in my life. That person help me to grow to be the best that I could possibly be. This person sacrificed everything to help me to the point that in their efforts they died for me. It’s hard to understand this amount of sacrifice. It’s hard to swallow, but I learned from sacrifice of this special person that living is not taking but that in giving to others is when you really achieve true purpose and happiness. That’s why I do this. I want to be of service to you so you can achieve the dreams, success and happiness that you long for in your business.

Servicing others is the true wealth and the path for happiness. When you are successful, I’m successful. So with that let me tell you about my recent struggles.

I have personally helped business owners who were on the verge of going out of business to making a profit in as little as a few weeks.

But you want to know something interesting? Just a few years ago my wife and I were homeless and living in the van and sleeping in the office. That’s true! After 30 years my business was failing and I was laying off 100’s of employees. I was losing $250,000 per month and was going down in flaming colors. The only cash I had remaining was the credit line on my credit card, and after I maxed this out I had nothing but the van and luckily a wife who still had faith in me. Creditors were calling; I was being sued and hauled into court to stand before the judge subject to debtor exams. I had judgments filed against me, and creditors coming to the office and seizing assets. I tried everything but nothing worked. I just kept going losing money, more money and more money --- till it was all gone. I lost my business, cars, airplane, and even the home I was living in.

Everything gone!

No matter how hard I tried flipping homes, even though I worked 14 hours per day, nothing was working. I was so stressed that I ground down my teeth down and cracked every tooth. I had to find another way of making money flipping homes that would not cost me 1000’s of dollars. I could no longer spend thousands of dollars which I no longer had, on the old school approach that that cost 1000’s had returned nothing.

Finally late one night I found myself sitting on the edge of the bed with a gun in my hand and the memories’ of the business past. Than I had an awakening.

I heard a voice that said “what you think and feel is not reality; flipping homes is not brain surgery; it really is easy; you can do it.”

How hard can it be!

You just need to get educated and find out how other companies are making money flipping homes.

So after many failures I figured it out. I wrote this basic guide to help you. Servicing others is the true wealth and the path for happiness. When you are successful, I’m successful.

About the author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 40 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 38 years.

Dennis Love, DennisLove.com are spoke persons or trademarks of Lever 4 Funding LLC an Arizona Limited Liability Company. This is for educational purposes and you should contact competent individuals such as Attorneys, CPA, Real Estate Brokers for expert advice. Information presented is not considered accurate and complete. To the extent this message includes any tax or legal

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